Saudi Export Recovery Weighs on Oil Prices
International oil prices continued to fall for a fourth consecutive trading day on Monday, marking their longest losing streak since June. Despite Iran-backed Houthi militants launching fresh attacks on Saudi targets, a rebound in Saudi crude exports and market expectations of a diplomatic breakthrough between the US and Iran outweighed supply concerns raised by geopolitical conflict.
As a result, Brent crude futures (UKOIL-F) fell to $101.97 per barrel, while WTI crude futures (USOIL-F) stood at $94.18. The direct cause of the recent pull-back in oil prices is that Saudi Arabia mitigated the impact of the East-West pipeline shutdown on actual supply by adjusting shipping routes.
Saudi Aramco suspended some exports via Yanbu after Houthi militants attacked the East-West pipeline connecting Saudi Arabia's eastern oil fields to the Red Sea port. However, preliminary data from Kpler show that Saudi crude exports since September have recovered to more than 4 million barrels per day, significantly higher than 2.4 million barrels per day in August.
The resumption of diplomatic contacts between the US and Iran is another reason weighing on oil prices. Qatari Foreign Ministry spokesman Majed al-Ansari said Qatar is maintaining communication with both the US and Iran to push them back to the negotiating table, while Iran has submitted conditions for resuming negotiations through mediators.